Many people who opt for home loans think it is an above-board process that is complete with the sanctioning of the home loan. Whereas the stark reality is that applying for a home loan is the beginning of the calculating process. Securing a home loan is usually a simplified procedure but cost overruns may occur if the loan applicant does not scrutinize and keep his loan records meticulously. For instance, it is common for a home loan applicant to disburse significant amounts of money for obligatory commitments like loan application fees, stamp duty, mortgage insurance, pest inspection reports, builder's reports, registration fee and refinancing fees. These incidental expenses should be instantly added to the loan records as integral expenditure.

Watch out for common errors

Again, it has been observed that a steep 50 percent of loan records have gross miscalculations. These may range from mistaken interest rates payable at wrong intervals, and simple errors like the entry of a wrong total sum. These could seriously impact the home loan applicant who may be financially shattered by a raw deal. Therefore, it is incumbent on the loan recipient to check and double check the loan statement that he is handed.

Precautionary measures

Again, when a person is applying for a loan, he should carefully scrutinize the fine print. The rule of thumb is that the more flexible the loan, the higher the interest rate. It is important to compare all the loans with their varying interest rate regimes, before actually settling for a particular loan. When a broker is involved, it is important to question the broker on whether he is charging a fee for his services. When a loan is routed through a broker, the question of commissions arises, and it is important the loan applicant should demand a rebate on the commissions a broker earns.

It is important to keep all pertinent information relating to a home loan in a safe place. The overriding importance of this cannot be overemphasized. It is wise to make extra copies of all loan applications and consign them to a non-hazardous environment so that they can be accessed immediately. Home loan repayment records, especially, should be carefully assembled so that the lender is unable to cheat the home loan recipient. Remember that prompt payments on home loans will increase the home loan recipients' credit worthiness rating.

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